Littlemill unveils 2017 Private Cellar Edition

3 burning whisky questions

Dos and Donts of Whisky Cask investment

2017-08-02

“The secondary (auction) market continues to become more important as a growth industry. 2016 was the first time traditional retail routes to market were overlooked in favour of auction for what in effect was a retail/primary market release.”

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“Strathearn distillery sold their first 100 bottles of Scotch through Perth-based Whisky Auctioneer rather than seeking a more traditional retail route to market. With the benefit of hindsight this looks to have been a financially sound decision for Strathearn. The lowest achieved price for a 50cl bottle of three-year-old Scotch was £315, and bottle number 1 sold for a staggering £4,150.

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In the primary market, further illustrating the unprecedented demand for old and rare Scotch, Macallan released 500 bottles of forty-year-old spirit for £5,000 per bottle. Part of the allocation was sold by the distillery through a ballot. Anyone wanting a bottle applied online and names of the lucky few were then drawn at random. According to The Macallan, their offer was fifteen times oversubscribed and bottles already trade at auction for around £6,500.” (read more)

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Anyway, as the second market for whisky is thriving, private investors are now increasingly directly looking into investing their cash in casks rather than individual bottles… I then got in touch with Rare Whisky 101 co-founder David Robertson to find out more about this new trend!

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Hi David, you recently said “we have always advised our customers against buying casks filled with “new-make spirit” – could you explain why?

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Yes, we feel that buying newly distilled and filled casks today is a risky purchase. The industry has increased production, many brand owners have laid down millions of litres of alcohol and are looking to become self sufficient in stock laydown. We don’t see the value in a private client buying a few casks of new make spirit and looking to sell it back to a large brand owner in the future. The brand owner for a large blended scotch will want to buy in large quantities at bulk (discounted) prices and will not deal with small owners who own 1 to 10 casks. However, if private clients want to buy some new filled casks and hold them for 10 to 20 years and bottle them privately for their own consumption then that is a charming thing to do…just not an investment play.

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You’re also warning casks owners not to hold on to them for too long: why? What does “too long” mean when it comes to whisky casks?

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Too long from a quality point of view and too long from an alcohol strength point of view. Quality is key and older isnt always better. Sometimes older can mean dry, woody, tannic, unbalanced. Older can also mean that the % abv of the remaining whisky has fallen below 40% abv which means the product cannot be bottled as scotch whisky.

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Rare Whisky 101 is now launching a new cask brokerage service: could you please tell me more about this and the idea behind this new service?

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We have been asked by our clients to help assist them in sourcing old and rare stocks starting with bottles and they have now added an interest in acquiring casks that can be bottled. From the research we have done, there are many brand owners in Scotland that have many old and rare casks. They tend to keep their own makes i.e. casks of whisky from their own distilleries, but they have also been long owners of non group casks (casks of whisky from other distilleries) likely picked up decades ago for the blending scotch business. We can help match these cask owners with private clients.

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A bit more about David:

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Whisky is in David’s blood – Born at Royal Brackla Distillery, he grew up around distilleries before going to university to study Brewing & Distilling. David is a Keeper of the Quaich.

In August 1994 he became the youngest Distillery Manager in Scotland. He went on to become the Master Distiller for one of the most revered of all distilleries – The Macallan. David was responsible for the creation of some of the most iconic whiskies ever released, including The Macallan’s ‘Fine & Rare’ range. Fortunate to travel widely with The Macallan he saw first hand the burgeoning demand for aged, vintage and rare whiskies in North America, Europe and Asia.

In August 2006 David joined Whyte and Mackay as Innovation Director and led the renaissance of The Dalmore, developed the Shackleton Arctic project and championed the focus internally away from bulk and blend to premium and single malt.

David set up his own Whisky Consultancy in 2012 providing expertise and advice to the wider industry which has now evolved as part of RW101.